? Club is confident it can comply with financial strictures
? Manager will release dead wood players to save on wage bill
When Manchester City begin their inaugural Champions League campaign among the European elite, their opponents will be forgiven for examining the balance sheet as closely as the team sheet.
City begin their European adventure in the same season as new Uefa rules designed to control rampant salary inflation and temper the culture of clubs spending their way to success.
Shortly after City begin their group matches, the Sheikh Mansour-owned club ? which has already spent hundreds of millions climbing into the gilded cage of the European elite where consistent entry to the Champions League brings in a minimum of �25m a season and ensures the continent's top players take you seriously ? will release their annual results.
The sea of red ink is expected to spill even further than last year's record �121m deficit, but club officials will again insist that it represents the last big splurge before the new rules kick in ? and they begin to claw their way to break even. Cynics may feel they have heard that before, yet City insiders insist that a major three-year splurge was always the plan in order to take the club from 14th in the Premier League to the Champions League places.
The rules will apply to the financial results from the coming season, rather than the one that has just passed, and will hit the headlines when they are published in the autumn. Uefa's accountants will begin examining the 2011-12 results in the 2012-13 season.
The rules say clubs are required to break even, excepting a ?45m "acceptable deviation" over the first two-years. Over the next three-year monitoring period, that will reduce to ?30m, then again for the following three-year period.
Garry Cook, the Manchester City chief executive who arrived in the blistering Monaco sun alongside director of football Brian Marwood, sits on the European Club Association (ECA) financial committee.
Fans computing the mind boggling array of attacking talent available to Roberto Mancini following another �98m summer shopping spree ? and more importantly those now stewing in the stands ? might be forgiven for wondering how that squares with the avowed intention of complying.
The answer ? they claim ? lies both in City's ambitious new plans for an 80 acre development surrounding their stadium, including 16 new pitches and a new 7,000 capacity arena for the youth and reserve teams, and their bullish insistence that commercial income will soar in line with their new status.
A major problem, as at Chelsea, is in removing high earning dead wood from the balance sheet. There is confidence that the vast majority of the group of players signed in the early stages of the revolution under the management of Mark Hughes who now have no chance of a first team berth ? Craig Bellamy, Roque Santa Cruz, Shaun Wright-Phillips, Emmanuel Adebayor and Wayne Bridge among them ? will be sold or farmed out on loan ahead of next week's transfer deadline. That could cut an estimated �6m from the club's huge wage bill.
A key plank of Manchester City's case is their ambitious plan to raise revenues. To a greater or lesser degree, it is the same story you will hear from Manchester United, Chelsea, Liverpool and Arsenal: one of expanding into growing markets in Asia and the US, bringing in new commercial partners, and better exploiting broadband and digital media. At City, they also talk of ensuring the stadium is used 365 days a year and possible future expansion.
There is widespread concern about the recently announced Etihad sponsorship deal, believed to be worth between �350m and �400m over 10 years, for naming rights to the stadium. Yet here, too, Cook and his fellow executives believe they can prove to a Uefa panel, which will be convened to determine a fair market rate and deduct income from City's balance sheet if necessary, that the deal is a fair one.
City will point to its long-term nature and to its tripartite construction ? Etihad will not only sponsor the stadium and the shirts but the sprawling academy that will surround it. They are banking on its unprecedented nature, and the rapidly rising value of sponsorship demonstrated by their neighbours United's �40m deal with DHL to be sponsors of their training kit, to carry the day.
For all the tough talk from Michel Platini over the new rules, the caveats agreed by the ECA (including those discounting any contract signed before they were announced and rewarding clubs for showing a positive direction of travel) could be enough to smooth the path of the big clubs.
Uefa insiders concede that the big stick of expulsion from competition is very much a last resort and plan to announce a sliding scale of other possible penalties before the end of the year. Publicly, they talk tough. "We will apply these rules strictly in order to secure the future of our game," Uefa's secretary general, Gianni Infatino, warned the qualified clubs before the draw.
But he also talked of working "hand in hand" with clubs and there is no doubt the approach will more collaborative than many initially believed. Meanwhile, City will argue that their ambitious project to regenerate an entire corner of a city as well as a football club can tally with Platini's attempt to level the financial playing field and secure his legacy.
Source: http://www.guardian.co.uk/football/2011/aug/25/manchester-city-champions-league-financial-rules
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